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PTC Inc. and Rockwell Automation, Inc. today announced that they have entered into a definitive agreement for a strategic partnership that is expected to accelerate growth for both companies and enable them to be the partner of choice for customers around the world who want to transform their physical operations with digital technology. (Photo: Business Wire)

NEEDHAM, Mass. & MILWAUKEE--(BUSINESS WIRE)--PTC Inc. (NASDAQ: PTC) and Rockwell Automation, Inc. (NYSE: ROK) today
announced that they have entered into a definitive agreement for a
strategic partnership that is expected to accelerate growth for both
companies and enable them to be the partner of choice for customers
around the world who want to transform their physical operations with
digital technology. As part of the partnership, Rockwell Automation will
make a $1 billion equity investment in PTC, and Rockwell Automation’s
Chairman and CEO, Blake Moret, will join PTC’s board of directors
effective with the closing of the equity transaction.

The partnership leverages both companies’ resources, technologies,
industry expertise, and market presence, and will include technical
collaboration across the organizations as well as joint global
go-to-market initiatives. In particular, PTC and Rockwell Automation
have agreed to align their respective smart factory technologies and
combine PTC’s award-winning ThingWorx® IoT, Kepware®
industrial connectivity, and Vuforia® augmented reality (AR)
platforms with Rockwell Automation’s best-in-class FactoryTalk®
MES, FactoryTalk Analytics, and Industrial Automation platforms. The
result will be an unmatched integrated information solution that will
enable customers to achieve increased productivity, heightened plant
efficiency, reduced operational risk, and better system interoperability.

“This strategic alliance will provide the industry with the broadest
integrated suite of best-in-class technology, backed by PTC, the leader
in IoT and augmented reality, and Rockwell Automation, the leader in
industrial automation and information. Our combined customer base will
benefit from two world-class organizations that understand their
business and deliver comprehensive, innovative, and integrated
solutions,” said Jim Heppelmann, President and CEO, PTC. “Leveraging
Rockwell Automation’s industry-leading industrial control and software
technology, strong brand, and domain expertise with PTC’s award-winning
technology enables industrial enterprises to capitalize on the promise
of the Industrial IoT. I am incredibly excited about this partnership
and the opportunity it provides to fuel our future success.”

Blake Moret, Chairman and CEO, Rockwell Automation, said, “We believe
this strategic partnership will enable us to accelerate growth by
building on both companies’ records of innovation to extend the value of
the Connected Enterprise and deepen our customer relationships. As IT
and OT converge, there is a natural alignment between our companies.
Together, we will offer the most comprehensive and flexible IoT offering
in the industrial space. Our equity investment in PTC reflects our
confidence in the partnership and the significant upside we expect it to
create for both companies as we work together to profitably grow
subscription revenue.”

Rockwell Automation’s solutions business will be a preferred delivery
and implementation provider, supported by a robust ecosystem of partners
that both companies have established. The strength of both companies
across geographies, end markets, and applications is complementary.

Terms

Under the terms of the agreement relating to the equity investment,
Rockwell Automation will make a $1 billion equity investment in PTC by
acquiring 10,582,010 newly issued shares at a price of $94.50,
representing an approximate 8.4% ownership interest in PTC based on
PTC’s current outstanding shares pro forma for the share issuance to
Rockwell Automation. The price per share represents an 8.6% premium to
PTC’s closing stock price on June 8, 2018, the last trading day prior to
today’s announcement. Rockwell Automation intends to fund the investment
through a combination of cash on hand and commercial paper borrowings.
Rockwell Automation will account for its ownership interest in PTC as an
Available for Sale security, reported at fair value.

PTC and Rockwell Automation Share Repurchases

PTC intends to use the proceeds from the equity investment to repurchase
stock to offset dilution.

As separately announced today, Rockwell Automation is increasing its
share repurchase target for fiscal year 2018 to $1.5 billion. This
represents a $300 million increase to its previous plans to repurchase
$1.2 billion of its stock in fiscal year 2018.

Timing

The investment transaction is subject to customary closing conditions
and regulatory approvals, and is expected to close within 60 days.

On June 11, Rockwell Automation and PTC will showcase their
complementary technology and solutions at Rockwell Automation’s TechED,
the industry’s premier training and education event to help improve
machine performance, optimize plants, and empower a Connected
Enterprise. To watch a livestream of the event, please visit the TechEd
site. The livestream
will occur at 8:00 am PDT / 11:00 am EDT.

On June 18, PTC and Rockwell Automation will again showcase their
complementary technology and solutions at LiveWorx®
2018, the world’s leading digital transformation conference for the
enterprise. To register, please visit the LiveWorx
Registration page.

About PTC (NASDAQ: PTC)

PTC helps companies around the world reinvent the way they design,
manufacture, operate, and service products in and for a smart, connected
world. In 1986 we revolutionized digital 3D design, and in 1998 were
first to market with Internet-based product lifecycle management. Today,
our leading industrial innovation platform and field-proven solutions
enable you to unlock value at the convergence of the physical and
digital worlds. With PTC, manufacturers and an ecosystem of partners and
developers can capitalize on the promise of the Internet of Things and
augmented reality technology today and drive the future of innovation.

PTC, ThingWorx, Kepware, Vuforia, LiveWorx, and the PTC logo are
trademarks or registered trademarks of PTC Inc. or its subsidiaries in
the United States and in other countries.

About Rockwell Automation (NYSE: ROK)

Rockwell Automation, Inc., the world’s largest company dedicated to
industrial automation and information, makes its customers more
productive and the world more sustainable. Headquartered in Milwaukee,
Wis., Rockwell Automation employs approximately 22,000 people serving
customers in more than 80 countries.

Forward-Looking Statements

This news release contains statements about future growth and growth
acceleration, business performance, the integration and development of
solutions, the closing of the equity transaction and the use of proceeds
and share repurchases. These statements are “forward-looking statements”
as defined in the Private Securities Litigation Reform Act of 1995.
Words such as “believe”, “estimate”, “project”, “plan”, “expect”,
“anticipate”, “will”, “intend” and other similar expressions may
identify forward-looking statements. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including the fact that growth may not occur or
accelerate as expected, subscription may not grow profitably as
expected, the equity investment may not close when or as expected and
any use of proceeds or share repurchases may not occur as expected, and
the integration of the solutions and development of future solutions may
not occur as expected, and those risks and uncertainties described in
the companies’ filings with U.S. Securities and Exchange Commission.
These forward-looking statements reflect our beliefs as of the date of
filing this release. We undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.